1. ONCOR Electric Delivery/ Texas New Mexico Power East Bell County to TNP One 345 kV Line Upgrade Projects Board of Directors July 17, 2007

2. Description of Project
A new East Bell County 345 kV switching station in the Sandow to Temple 345 kV circuit.
Cost: Approx. $10,489,000
A new 40 mile East Bell County to TNP One 345 kV double circuit line using bundled 1590 kcmil ACSR conductor to allow 2730 Amps.
Cost: $48,580,000.
Upgrade Temple Switch to Boggy Creek 138 kV line to allow conductor to operate at elevated temperature allowing for 1146 Amps.
Cost: $350,000
Reconductor Temple to Salado 345 kV circuit with ACSS/TW to obtain 3200 Amps.
Cost: $6,713,000
(TNMP) Upgrade terminal equipment on the TNP One-Twin Oak 345 kV double circuit line to obtain Amps.
Cost: $3,205,000
TOTAL COST: $69,337,000
New Line
Reconductor
BOD 7/17/2007
Elevated Line
Terminal Work

3. Project Need Scheduled in-service in December 2010
The East Bell County-TNP One 345 kV line upgrade projects are economically justified, contingent upon the construction of at least one of the two Oak Grove units or Twin Oaks 3.
Oak Grove has a signed interconnection agreement and has recently obtained its air permit.
BOD 7/17/2007

4. PRODUCTION COST SAVINGS (PCS) OF EAST BELL COUNTY - TNP ONE PROJECT
Economic Analysis
PRODUCTION COST SAVINGS (PCS) OF EAST BELL COUNTY - TNP ONE PROJECT
GENERATION SCENARIO
Annual
PCS ($M)
ANNUAL
CARRYING
CHARGE
RECOMMEND
NO ADDITIONAL GENERATION
0.41
11.56 NO
OAK GROVE 1
14.45
11.56
YES
OAK GROVE 1& 2
22.99
11.56
YES
The annual carrying charge is the first year annual revenue requirement for the project (capital cost x 16.8%), which should be less than the annual production cost savings for the project to be considered economic. All scenarios include Sandow 5.
BOD 7/17/2007

5. Stakeholder Review
The Stakeholder review period for this project was held in December 2006
There were no dissenting comments on this package of projects and ONCOR/TNMP resolved all questions
TAC did not take any action on this project
BOD 7/17/2007

6. ERCOT Support for the Project
This endorsement of this project was put on-hold after ERCOT review until the generators obtained both an interconnection agreement and an air permit. Oak Grove has recently satisfied these conditions.
ERCOT Staff recommends that the project be endorsed by the Board.
BOD 7/17/2007

7. QUESTIONS?
BOD 7/17/2007